Long before the pandemic of the virus hit the world, it was drowning in a pool of excess oil. The oil index ($XOI) declined 500 points in 2018 from 1600 level to a low in December of that year. Then, it was range bound from the lows of 1100 to a high around 1300 until February of this year.
60% decline
Yes, in one month the index fell below 500 from the 1300 level. The flu arrived and it showed its effects. Since that dangerous level, it has staged a rally, if you want to call reaching the 800 point level a rally. It is like a baseball game (since this would be that season) where you are losing 12 to nothing. Then, your team scores six runs to make the final look competitive. It wasn't. It was a rout.
Asset value
At its present price, oil is trading below its asset worth. What does this mean, you ask? Could it go lower? These are good questions. It means that to find and produce a barrel of oil, a certain level of investment is required. Remember, we all need energy every day and oil with its by-products are in many, many consumer items. In a way, it is almost like water at least to our way of life. We have to have it. The present price of crude on Friday was $19.78 for US sweet and $26.44 for Brent sour. No oil firm can survive with those prices.
If you believe that market price tests its high as well as its lows, then we have tested the 1969 lows just prior to the first Arab Oil Embargo. You can do the math, but keep in mind the value of the dollar has declined due to inflationary forces and debt. Also, state and federal taxes have been increased. Charting is a necessary tool.
So, what price should it be?
Basically, oil has too much invested in it by too many influential firms, people and nations to disappear. It is the world's most important commodity for the present deviation to radically change its need and importance. When all is said and done, oil should trade from $42 to $64. However, many price changes will occur before that stability is reached. Then, one must consider the rise of electric cars into the equation. At the moment, every oil firm and producer is cutting back production to minimize the losses because oil is selling for less than it costs to produce.
In related industries, both the trucking and airlines lockdown has deepened the hurt for oil firms. The need for trucking has declined considerably. Flightrader 24 reports the number global flights for April was 33,500. The normal number is around 100,000 flights per month. Together, this lack of demand has added to the glut. This will take time to change, especially with public demand.
A closer look...
Exxon reported its first losing quarter since 1997. As a result they are cutting spending by 30%. They are not alone. The other American giant, Chevron also announced it is cutting spending. However, both firms declared that their dividend is safe. This will add some stability for its share price. The two big boys were joined by another conglomerate, Conoco-Phillips. Together, the three will trim production by 600K barrels a day this month. Exxon and Chevron will cut production another 800K barrels a day in June. This is a serious decline in energy. When you add the agreement between Russia and OPEC to cut production, the present oil glut will be razor cut, little-by-little. Global usage was about 100 million barrels a day before the virus. It dropped 30 million barrels in April.
These production cuts take time for their effect. If the world economy begins to racket up by December along with the US and Chinese economies, I foresee another oil spike come next early in 2021. Why? Because the demand will exceed the supply. You should know this from the recent financial crisis of 2008. The playbook of production cuts work, but it comes with a heavy price.
In the meantime, as stated, there will be many obstacles to climb Mt. Normalcy before stability returns. For instance, Royal Dutch Schell announced a dividend cut from 47 cents down to 16 cents. Sweden's giant, Equinor eliminated its first quarter dividend. Many, many other smaller firms have cut their dividend completely. This will continue to wreck oil share prices. Even with all producers seeking to trim production, Mt. Normalcy has other roadblocks like bankruptcies (WLL-Whiting), job cuts and possible consolidation. I think the last point is a positive. Acquisition is cheaper than exploration. Estimates of capital expenditures is around a whopping $100 billion for 2020.
World suppliers in seeking to cut production will find it harder than US firms. They have sharing agreements (UK and Sweden), government partners (socialist nations) and unions. Yes! At least they respect workers rights, especially skilled workers in this field. However, this respect has a costs.
Deep Water Rigs
Any driller of offshore wells faces a serious dilemma. By shutting down these wells, it means a total loss of investment. Even though the driller knows there is oil, the process needs to begin all over again to capture that oil.
The rigs on land do not have this problem. They are closer to a light switch. They can be shuttered and reopened with little investment costs. There are also many firms who hedged their production like my favorite, Encana now called Ovintiv (hate that name). They should survive. If you speculate, the big boys will have no trouble surviving this downturn and they come with a dividend. I would wait until a better perspective is known about the virus and its possible second wave. Don't let that stimulus check burn a hole in your pocket - save it or pay off personal debts. Peace.
Wednesday, May 6, 2020
Wednesday, April 29, 2020
Odds and Ends: April 2020
"To error is human, to forgive, divine."
- Alexander Pope
As the warm weather approaches, fortunately for all of us, the flu season will pass. What will linger is the wrangling for power within the government, Monday Morning Quarterbacking. In hindsight, we all should win the Super Bowl, but our two political parties are capable of ruining a wet dream.
We will hear that President Trump waited too long to enact a policy of prevention. He will counter that China hid the damage of contagion. He will lash out at experts, pundits and Democrats like a real estate agent taking any and all listings. If he puts enough on the wall, one may sell. This is the presidents position. The Democrats will basically do the same process. The only difference will be the names. They will fault the president and the Republican senate. They will cry about the allocation of the stimulus. They will produce new "experts" who will suggest that the administration took the wrong approach. This is why our government sucks! No one seeks what is best for the nation. No one enacts like Profiles in Courage.
Dear Reader, there was no playbook for this situation. My earlier comments and feeling was that the government overreacted. Now, I'm thinking, "It is always better to be safe than sorry." Let us all thank God that the virus was not as bad as everyone feared. It is time to move on.
The problem is what remains of our economy and life situation. My position was and still is the same. We need to protect workers. Globalization is another word for taking from America and giving our wealth to the world. Well, world, we have nothing left to give. Did you not see the lines of our citizens at food banks? Our jobs only produce enough to last until the next paycheck. It is true that we live above our means, but these last two crisis's have opened our minds. We will cut video streaming. We will live a more simple life and we will put something away for a rainy day. With that said, we should also demand that things be produced once again in America. We have nothing! We produce nothing! The supply chains revealed this aspect. We need to be self-sustaining once again. We need to return to our manufacturing roots that provide a livable wage. This will stop the climb of poverty and homelessness along with the new fear of food insecurity.
Where we are now...
With that said, let us look at conditions as the S&P ratings service does. From their viewpoint we are in trouble. Sebastian reminds us that mortgage debt fueled the crisis of 2008. The S&P worries that corporate debt could fuel a new crisis. They say that corporations have been borrowing up at a 75% clip. US firms now owe a record $10 trillion. Their credit quality is at an all-time low. They have downgraded more companies in the first quarter than ever before. In the financial crisis of 2008 the S&P downgraded a total of 1500 companies. In the first three months of 2020, they have already downgraded 1270 firms.
This cannot all be laid at the foot of the virus. Last year and looking ahead into this year, S&P ratings predicted a higher level of defaults. It put the percentage at 3.3%. Now, it is revised up to 10%.
It gets worse...
By the end of this year, S&P sees the rate of defaults climbing over 13%. If this happens, defaults will break a 40-year record to the negative side. Not good.
Quick Oil Lesson
The contract to purchase oil did something no one would ever predict: it went negative in value.
How can this be, you ask? People, there are two contracts for oil. The US contract and the European contract. There is a big difference between them. When the American contract expires, the holder of the contract agrees to take possession of the quantity of oil. No one has the ability at this moment to store oil, especially with declining prices and outlook. This is why speculators were dumping contracts.
Think about this? If you had a storage facility, you could have taken possession of oil for free and received payment to do so. I think of these things, but I lack the money to enact the ideas.
The Brent oil contract is ended in a cash solution. The pluses and minuses are calculated. It is no different than buying and selling a stock, just much, mucho bigger numbers.
However, there are other problems with oil. The basics of supply and demand. The demand side is so bad that the most important commodity in the world is trading below its asset value. Could it go lower, you ask? Possibly, but in reality, too much money is invested into this sector for the deviation to radically change its importance and value. The first signs of a return to normalcy will have a huge request that will give oil a trading range until the global economy sets its footprint level.
Does 2% Interest You?
Switzerland, the one time home for gold and now, the land of negative interest rates, just tried an experiment. In an effort to retain its high income, "special" clients who were taking money out of the nation, the Swizz bank piloted a program that offered a 2% interest rate. Guess what? It got oversubscribed. This is the sorry state of the world for savers and one to which central banks machinations has put us.
Speaking of central banks or the devil, the IMF sees the worst world recession since the Great Depression. These are the same people who four months ago said global growth would be 3.3%. They are seeking aid from wealthy nations of $8 trillion to help poor countries in South America, Asia, Africa and the Middle East. Question? If they are a bank, how come they don't give their money to these needy nations? Better yet, ask China to cover the bill, after all, they made the most money from all of their manipulations. Let them show a nicer face to the world. Don't count on that...
SBA
The agency is providing loans to small businesses in America. How about the "poor" NBA? They have cancelled all their games due to the virus. So, they gave a loan of over $4 million to the LA Lakers. Another example how not in touch with reality our government leaders are.
Real Unemployment
The media was making noise about the huge record jump in unemployment numbers (26 million).
They should have looked deeper into the reports from state agencies to the Bureau of Labor Statistics. JFL enlightened us to the reality that states are doing a terrible job with unemployment claims. States have cut back on insurance for workers as well as the agencies that address the claims. It is almost impossible to file a claim on the internet and even worse by phone. Then, there are millions of migrants who were working full-time, but of course, they will not be able to file a claim. JFL figures that there are another13 plus million laid off workers to which makes the total unemployment figure rise to 40 million. Yowzah!
NFL Draft...
was a success before and after. When ABC offered advertising for the event, companies bid more than ABC had slots. They could have raised their fees. The actual event garnered the highest ratings ever for this type of broadcast. We love our football.
- Alexander Pope
As the warm weather approaches, fortunately for all of us, the flu season will pass. What will linger is the wrangling for power within the government, Monday Morning Quarterbacking. In hindsight, we all should win the Super Bowl, but our two political parties are capable of ruining a wet dream.
We will hear that President Trump waited too long to enact a policy of prevention. He will counter that China hid the damage of contagion. He will lash out at experts, pundits and Democrats like a real estate agent taking any and all listings. If he puts enough on the wall, one may sell. This is the presidents position. The Democrats will basically do the same process. The only difference will be the names. They will fault the president and the Republican senate. They will cry about the allocation of the stimulus. They will produce new "experts" who will suggest that the administration took the wrong approach. This is why our government sucks! No one seeks what is best for the nation. No one enacts like Profiles in Courage.
Dear Reader, there was no playbook for this situation. My earlier comments and feeling was that the government overreacted. Now, I'm thinking, "It is always better to be safe than sorry." Let us all thank God that the virus was not as bad as everyone feared. It is time to move on.
The problem is what remains of our economy and life situation. My position was and still is the same. We need to protect workers. Globalization is another word for taking from America and giving our wealth to the world. Well, world, we have nothing left to give. Did you not see the lines of our citizens at food banks? Our jobs only produce enough to last until the next paycheck. It is true that we live above our means, but these last two crisis's have opened our minds. We will cut video streaming. We will live a more simple life and we will put something away for a rainy day. With that said, we should also demand that things be produced once again in America. We have nothing! We produce nothing! The supply chains revealed this aspect. We need to be self-sustaining once again. We need to return to our manufacturing roots that provide a livable wage. This will stop the climb of poverty and homelessness along with the new fear of food insecurity.
Where we are now...
With that said, let us look at conditions as the S&P ratings service does. From their viewpoint we are in trouble. Sebastian reminds us that mortgage debt fueled the crisis of 2008. The S&P worries that corporate debt could fuel a new crisis. They say that corporations have been borrowing up at a 75% clip. US firms now owe a record $10 trillion. Their credit quality is at an all-time low. They have downgraded more companies in the first quarter than ever before. In the financial crisis of 2008 the S&P downgraded a total of 1500 companies. In the first three months of 2020, they have already downgraded 1270 firms.
This cannot all be laid at the foot of the virus. Last year and looking ahead into this year, S&P ratings predicted a higher level of defaults. It put the percentage at 3.3%. Now, it is revised up to 10%.
It gets worse...
By the end of this year, S&P sees the rate of defaults climbing over 13%. If this happens, defaults will break a 40-year record to the negative side. Not good.
Quick Oil Lesson
The contract to purchase oil did something no one would ever predict: it went negative in value.
How can this be, you ask? People, there are two contracts for oil. The US contract and the European contract. There is a big difference between them. When the American contract expires, the holder of the contract agrees to take possession of the quantity of oil. No one has the ability at this moment to store oil, especially with declining prices and outlook. This is why speculators were dumping contracts.
Think about this? If you had a storage facility, you could have taken possession of oil for free and received payment to do so. I think of these things, but I lack the money to enact the ideas.
The Brent oil contract is ended in a cash solution. The pluses and minuses are calculated. It is no different than buying and selling a stock, just much, mucho bigger numbers.
However, there are other problems with oil. The basics of supply and demand. The demand side is so bad that the most important commodity in the world is trading below its asset value. Could it go lower, you ask? Possibly, but in reality, too much money is invested into this sector for the deviation to radically change its importance and value. The first signs of a return to normalcy will have a huge request that will give oil a trading range until the global economy sets its footprint level.
Does 2% Interest You?
Switzerland, the one time home for gold and now, the land of negative interest rates, just tried an experiment. In an effort to retain its high income, "special" clients who were taking money out of the nation, the Swizz bank piloted a program that offered a 2% interest rate. Guess what? It got oversubscribed. This is the sorry state of the world for savers and one to which central banks machinations has put us.
Speaking of central banks or the devil, the IMF sees the worst world recession since the Great Depression. These are the same people who four months ago said global growth would be 3.3%. They are seeking aid from wealthy nations of $8 trillion to help poor countries in South America, Asia, Africa and the Middle East. Question? If they are a bank, how come they don't give their money to these needy nations? Better yet, ask China to cover the bill, after all, they made the most money from all of their manipulations. Let them show a nicer face to the world. Don't count on that...
SBA
The agency is providing loans to small businesses in America. How about the "poor" NBA? They have cancelled all their games due to the virus. So, they gave a loan of over $4 million to the LA Lakers. Another example how not in touch with reality our government leaders are.
Real Unemployment
The media was making noise about the huge record jump in unemployment numbers (26 million).
They should have looked deeper into the reports from state agencies to the Bureau of Labor Statistics. JFL enlightened us to the reality that states are doing a terrible job with unemployment claims. States have cut back on insurance for workers as well as the agencies that address the claims. It is almost impossible to file a claim on the internet and even worse by phone. Then, there are millions of migrants who were working full-time, but of course, they will not be able to file a claim. JFL figures that there are another13 plus million laid off workers to which makes the total unemployment figure rise to 40 million. Yowzah!
NFL Draft...
was a success before and after. When ABC offered advertising for the event, companies bid more than ABC had slots. They could have raised their fees. The actual event garnered the highest ratings ever for this type of broadcast. We love our football.
Wednesday, April 22, 2020
If We Don't Adjust Now, It's Over
There are car lines and people lines all over the nation. Why are they in line? Food insecurity. Inability to put food on the table. Food banks are getting National Guard assistance to hand out food. I could add to that sentence, "For people in need." This is unsustainable. There also appears to be some fraud. When you wait in a car line in a newer model and expensive vehicle, do you really need help? Why, do you say that? Because those people like many Americans live above their means. The decision to purchase a new or newer model car takes away from income that could be used for other needs and responsibilities like rent or a mortgage. One of those needs is saving for a rainy day. It is pouring today. This is not cut and dry as the sentence or verdict implies. People in real estate need a newer, bigger vehicle for their job. It all comes down to conscience. In America today, people are losing their belief system due to the leadership in our nation. These so-called leaders have no conscience - just ego and greed.
The CORVID-19 will have one positive benefit. It revealed the weakness of our nation. We are no longer self-sufficient. The dangers to our future is terrifying. Need proof? Here is a capsulation.
Medical Supplies
When the virus hit hot spots like cruise boats, tourist locations and cities with high density like New York, the number of infected people overwhelmed the health system. Hospitals realized that they did not have enough of the right equipment to address this disease. They quickly realized that medical supplies like most of our medicine comes from...Can you guess? China.
Doctors, nurses and medical assistants have to hand over their protective gowns to the next shift because they have none in supply. This is one reason why so many become infected. Sadly, many have died. The head of hospitals did not plan for a rainy day. When they ordered new supplies, they have to wait until a Chinese firm can fill their request.
When patients need a ventilator, they will die because the next shipment from China has not arrived at port. Even if it did, there are no workers to unload the shipment. There are less truck drivers to deliver this life saving medical equipment. The contagion of all items that were mostly invented in the US, but outsourced elsewhere, reveals how phony our economy and our boasts are founded upon.
It gets worse! There are no swabs, no testing equipment, no masks, no PPE (personal protective equipment), no nothing. Why? It all comes from China!
People, we are testing 150,000 every day, it will take more than three years to test the nation. It is better to just test a worker to allow that person to work. The other tests should be allocated for people in need or questions about their health. The flu does not effect everyone. There is too much misappropriation of resources. In addition, when a local leader tries to initiate a response by seeking to purchase when that person sees as a local medical need, it ends up being a rip-off case. You see, real leadership seeks an answer. In the coronavirus situation, this means bidding on limited supplies. A .70-cents mask jumps to $7-bucks, as real leaders get caught by the system of the highest offer wins the bid. Because orders for medical supplies overwhelmed the few suppliers, the purchase becomes an auction. Only in America!
Last thought. If one of our great research labs in the US or Europe discovered a vaccine today, it will still end up in China. They produce much of the world's supply of medicine due to outsourcing of labor. Neither political party protects the American worker. This is a mortal sin that is revealed by the virus.
Core of the danger...
Critics pushed the president to enact the Defense Production Act. This measure forces manufacturers to produce whatever the government feels is necessary for the nation. It is mainly used in a time of war to which was declared by Congress.
Dear Reader, we have no manufacturers! We outsourced all our needs elsewhere. We are producers in name only. Apple phones are made in China. Nike sneakers are made somewhere outside of the US. Our cars come from Mexico. Our economy produces nothing! You can pass all the measures you want, but there are no factories to fill the request. Real economies like China, Germany and S. Korea are doing well because they can supply all their medical requests, especially testing. They have manufacturing!
Here is another sad point: too much of our food is imported. We don't need to do this. On the other hand, small farmers have to see their hard work in growing items like tomatoes, lettuce, fruits and vegetables lie rotting in fields because there are no workers to harvest this good produce. Even if the farmer gathers some of the crop with his family and friends, there are no truckers to deliver to the market. Food is going to escalate in price later this year and next. Globalization increases wealth elsewhere as our standard of living decreases. Our national debt which is the worst in the world, reveals this aspect.
A Lesson from History...
When time moved into the twentieth century, I'm talking 1901, Great Britain was recognized as the superpower in the world. They had the best navy, best army and the best standard of living. They contributed to more than their share of new inventions and ideas to better society. Then, the world went to war. The English army was not so great. The navy was suspect to a German idea, the submarine. The US saved the day because we had strong manufacturing to turn the tide of the war. England was found to be a "Paper Tiger." They still are.
If one looks back at the US history in war-time, this common thread is revealed.
The one big plus that gave the North over the South was the manufacturing in the North. The times change, but the story remains the same. The US won WWII because our manufacturing which produced our middle class, provided the edge to win the campaign. Manufacturing has a history of exploiting workers, but given the spirit of equality in our nation, unions evened out the playing field. Our standard of living rose to be the highest level ever in the world.
Until...
The rich and powerful bought off the political parties in our government. In one victory after another beginning with the Taft-Hartley Act, big money has destroyed unions and the middle class in our nation. The evidence is not just the food lines, but homeless people sleeping on streets in public. The poverty rate. Children without supervision, direction or a future. Our education results are one of the poorest in our history. Even "factory" models of education provided better results. Our economy rests on service jobs that do not provide enough to live. One works 40-plus hours and barely can pay rent. We are the
Paper Tiger of today.
Only hope
is to attack both political parties. We must force them to place high tariffs on all imported products. President Trump did a good thing in reducing corporate tax rates. He hoped to see a shift in production back into the US. Didn't happen. Companies found ways to circumvent the tariffs he imposed. Now, hard measures must be used. No exceptions! Tax every nation that exports into the US. Tax every American company who outsourced their product and then, import it back to the US. Place the tax so high that it forces companies to relocate back into the US. In addition, tax the wealthy. The income tax bracket should be raised to 50% with no loopholes for the wealthy. When Amazon pays no tax, it is time to end this corruption in politics. We need to attack politicians. We need to force their hand to address these ills of the nation. The best hope is to form a new political party that protects workers and ends all foreign wars by the military unless war is declared by Congress. We need this
yesterday!
The CORVID-19 will have one positive benefit. It revealed the weakness of our nation. We are no longer self-sufficient. The dangers to our future is terrifying. Need proof? Here is a capsulation.
Medical Supplies
When the virus hit hot spots like cruise boats, tourist locations and cities with high density like New York, the number of infected people overwhelmed the health system. Hospitals realized that they did not have enough of the right equipment to address this disease. They quickly realized that medical supplies like most of our medicine comes from...Can you guess? China.
Doctors, nurses and medical assistants have to hand over their protective gowns to the next shift because they have none in supply. This is one reason why so many become infected. Sadly, many have died. The head of hospitals did not plan for a rainy day. When they ordered new supplies, they have to wait until a Chinese firm can fill their request.
When patients need a ventilator, they will die because the next shipment from China has not arrived at port. Even if it did, there are no workers to unload the shipment. There are less truck drivers to deliver this life saving medical equipment. The contagion of all items that were mostly invented in the US, but outsourced elsewhere, reveals how phony our economy and our boasts are founded upon.
It gets worse! There are no swabs, no testing equipment, no masks, no PPE (personal protective equipment), no nothing. Why? It all comes from China!
People, we are testing 150,000 every day, it will take more than three years to test the nation. It is better to just test a worker to allow that person to work. The other tests should be allocated for people in need or questions about their health. The flu does not effect everyone. There is too much misappropriation of resources. In addition, when a local leader tries to initiate a response by seeking to purchase when that person sees as a local medical need, it ends up being a rip-off case. You see, real leadership seeks an answer. In the coronavirus situation, this means bidding on limited supplies. A .70-cents mask jumps to $7-bucks, as real leaders get caught by the system of the highest offer wins the bid. Because orders for medical supplies overwhelmed the few suppliers, the purchase becomes an auction. Only in America!
Last thought. If one of our great research labs in the US or Europe discovered a vaccine today, it will still end up in China. They produce much of the world's supply of medicine due to outsourcing of labor. Neither political party protects the American worker. This is a mortal sin that is revealed by the virus.
Core of the danger...
Critics pushed the president to enact the Defense Production Act. This measure forces manufacturers to produce whatever the government feels is necessary for the nation. It is mainly used in a time of war to which was declared by Congress.
Dear Reader, we have no manufacturers! We outsourced all our needs elsewhere. We are producers in name only. Apple phones are made in China. Nike sneakers are made somewhere outside of the US. Our cars come from Mexico. Our economy produces nothing! You can pass all the measures you want, but there are no factories to fill the request. Real economies like China, Germany and S. Korea are doing well because they can supply all their medical requests, especially testing. They have manufacturing!
Here is another sad point: too much of our food is imported. We don't need to do this. On the other hand, small farmers have to see their hard work in growing items like tomatoes, lettuce, fruits and vegetables lie rotting in fields because there are no workers to harvest this good produce. Even if the farmer gathers some of the crop with his family and friends, there are no truckers to deliver to the market. Food is going to escalate in price later this year and next. Globalization increases wealth elsewhere as our standard of living decreases. Our national debt which is the worst in the world, reveals this aspect.
A Lesson from History...
When time moved into the twentieth century, I'm talking 1901, Great Britain was recognized as the superpower in the world. They had the best navy, best army and the best standard of living. They contributed to more than their share of new inventions and ideas to better society. Then, the world went to war. The English army was not so great. The navy was suspect to a German idea, the submarine. The US saved the day because we had strong manufacturing to turn the tide of the war. England was found to be a "Paper Tiger." They still are.
If one looks back at the US history in war-time, this common thread is revealed.
The one big plus that gave the North over the South was the manufacturing in the North. The times change, but the story remains the same. The US won WWII because our manufacturing which produced our middle class, provided the edge to win the campaign. Manufacturing has a history of exploiting workers, but given the spirit of equality in our nation, unions evened out the playing field. Our standard of living rose to be the highest level ever in the world.
Until...
The rich and powerful bought off the political parties in our government. In one victory after another beginning with the Taft-Hartley Act, big money has destroyed unions and the middle class in our nation. The evidence is not just the food lines, but homeless people sleeping on streets in public. The poverty rate. Children without supervision, direction or a future. Our education results are one of the poorest in our history. Even "factory" models of education provided better results. Our economy rests on service jobs that do not provide enough to live. One works 40-plus hours and barely can pay rent. We are the
Paper Tiger of today.
Only hope
is to attack both political parties. We must force them to place high tariffs on all imported products. President Trump did a good thing in reducing corporate tax rates. He hoped to see a shift in production back into the US. Didn't happen. Companies found ways to circumvent the tariffs he imposed. Now, hard measures must be used. No exceptions! Tax every nation that exports into the US. Tax every American company who outsourced their product and then, import it back to the US. Place the tax so high that it forces companies to relocate back into the US. In addition, tax the wealthy. The income tax bracket should be raised to 50% with no loopholes for the wealthy. When Amazon pays no tax, it is time to end this corruption in politics. We need to attack politicians. We need to force their hand to address these ills of the nation. The best hope is to form a new political party that protects workers and ends all foreign wars by the military unless war is declared by Congress. We need this
yesterday!
Wednesday, April 15, 2020
Fed's, Other Unseen Sins
When you realize that inflation is an unseen tax, you will also begin to realize all the harm that the Federal Reserve inflicts onto our economy, especially to our standard of living. You may or may not know, there is an index that measures the quality of life in nations. We are not even in the top twenty!😕
If you are like the sad and confused emoji above, you need to read on. I also have some info for the rest of you.
Gasoline Prices
Have you noticed, at least everyone outside of California that petrol sells for around $2-bucks a gallon? Dear Reader, I remember working at a gas station and the price per gallon was .31-cents a gallon. The value of our dollars has declined that much. On the flip-side gasoline rose to over $4-bucks a gallon at one point. Sadly, with all of the Federal Reserve money printing, our dollar's purchasing power will cause a return to individual budget crushing of $4-bucks, again.
People and the media will blame the Arabs. It is our central banks fault. The Arabs get paid in US dollars. If the dollar buy less, they need a higher price. Everyone thinks this is inflation, it is the Fed who destroys our currency. This is the root belief in a gold backed currency. It stops the Fed from printing. This protects our purchasing power. It also keeps government out of our economy and that is a good thing.
Stimulus Package
This started out with the Democrats to help citizens, especially in an election year. The Republicans realized the dangers to industries like the airlines, hospitality and manufacturing, especially in an election year. This is how politicians think. Later, both political parties woke up to the vastness of danger to the entire economy.
They came up with a $2-trillion plus package. We soon learned that the shifty GOP could expand this stimulus to $6 trillion. Now, both parties are looking ahead to the election. While the iron is hot, they are seeking another stimulus package. The biggest hurdle is oversight. The other word for this is profiteering. President Trump is guilty. His ego sees a history book that refers to him as the FDR to the virus and economy. He has blocked out all Democrats. This aspect makes him a weak, small minded man.
Anyway, most of the money will go to big business. The talk about small business loans from the SBA is that, just talk. In a normal year, the SBA receives about 6,000 requests. Last week, they received 500,000 applications. They have $361 billion to lend. They already gave out $151 billion. A lot of that money will be lost to fraud. Doesn't matter to this bureaucracy because the Federal Reserve will buy all those loans, the good, the bad and the ugly. This takes us full circle as to other unseen sins of the Fed.
Let me ask you a question?
If banks knew that every loan that they made would make them richer, would they not approve every loan? Of course, they would. However, life being what it is, businesses fail. This is why banks only lend to people who don't need to borrow. Enter the Federal Reserve in this virus induced crisis. They have announced that they will buy everything and anything from corporate bonds to high yield notes to junk bonds. Common sense tells you that many of these issues will fail. They will end up worthless like a stock certificate from Radio Shack. Someone did a report in the last crisis in 2008 on our central bank. It showed that the Federal Reserve was leveraged to 77-1. In layman's terms, it was bankrupt! It is worse today and the next tidbit puts the leverage off the charts!
Foreign Institutions
There are dollar-denominated debt instruments being offered and traded in many countries in the world. The Bank of Settlements (BIS) estimates this dollar-denominated debt to be over $12 trillion. There are many reasons for these accounts. The central one is commodities. Nations need US dollars to enact a purchase of oil and other commodities. Now, this is the unspoken, unseen danger to the US. The Federal Reserve must comply liquidity to these institutions. In other words if these dealers fail, it will effect the dollar and its value. The Fed lends these firms not just billions, but trillions. This is a license to steal! People, this is not just big powers like the UK or Germany, but everyone out there. We are subsidizing the world. If derivatives are connected to these transactions and they are, the whole system could crash overnight. The Fed also does currency swaps with other central banks. There are other machinations that no one knows about, but in the end, the US taxpayer will be on the hook. By next year there will be rumblings in the global community to end the power of the dollar as the reserve currency of the world. When our dollar is surrendered to a basket of currencies, we all will feel inflation. Our dollar will buy less and then, you will remember this meme, End the Fed!
If you are like the sad and confused emoji above, you need to read on. I also have some info for the rest of you.
Gasoline Prices
Have you noticed, at least everyone outside of California that petrol sells for around $2-bucks a gallon? Dear Reader, I remember working at a gas station and the price per gallon was .31-cents a gallon. The value of our dollars has declined that much. On the flip-side gasoline rose to over $4-bucks a gallon at one point. Sadly, with all of the Federal Reserve money printing, our dollar's purchasing power will cause a return to individual budget crushing of $4-bucks, again.
People and the media will blame the Arabs. It is our central banks fault. The Arabs get paid in US dollars. If the dollar buy less, they need a higher price. Everyone thinks this is inflation, it is the Fed who destroys our currency. This is the root belief in a gold backed currency. It stops the Fed from printing. This protects our purchasing power. It also keeps government out of our economy and that is a good thing.
Stimulus Package
This started out with the Democrats to help citizens, especially in an election year. The Republicans realized the dangers to industries like the airlines, hospitality and manufacturing, especially in an election year. This is how politicians think. Later, both political parties woke up to the vastness of danger to the entire economy.
They came up with a $2-trillion plus package. We soon learned that the shifty GOP could expand this stimulus to $6 trillion. Now, both parties are looking ahead to the election. While the iron is hot, they are seeking another stimulus package. The biggest hurdle is oversight. The other word for this is profiteering. President Trump is guilty. His ego sees a history book that refers to him as the FDR to the virus and economy. He has blocked out all Democrats. This aspect makes him a weak, small minded man.
Anyway, most of the money will go to big business. The talk about small business loans from the SBA is that, just talk. In a normal year, the SBA receives about 6,000 requests. Last week, they received 500,000 applications. They have $361 billion to lend. They already gave out $151 billion. A lot of that money will be lost to fraud. Doesn't matter to this bureaucracy because the Federal Reserve will buy all those loans, the good, the bad and the ugly. This takes us full circle as to other unseen sins of the Fed.
Let me ask you a question?
If banks knew that every loan that they made would make them richer, would they not approve every loan? Of course, they would. However, life being what it is, businesses fail. This is why banks only lend to people who don't need to borrow. Enter the Federal Reserve in this virus induced crisis. They have announced that they will buy everything and anything from corporate bonds to high yield notes to junk bonds. Common sense tells you that many of these issues will fail. They will end up worthless like a stock certificate from Radio Shack. Someone did a report in the last crisis in 2008 on our central bank. It showed that the Federal Reserve was leveraged to 77-1. In layman's terms, it was bankrupt! It is worse today and the next tidbit puts the leverage off the charts!
Foreign Institutions
There are dollar-denominated debt instruments being offered and traded in many countries in the world. The Bank of Settlements (BIS) estimates this dollar-denominated debt to be over $12 trillion. There are many reasons for these accounts. The central one is commodities. Nations need US dollars to enact a purchase of oil and other commodities. Now, this is the unspoken, unseen danger to the US. The Federal Reserve must comply liquidity to these institutions. In other words if these dealers fail, it will effect the dollar and its value. The Fed lends these firms not just billions, but trillions. This is a license to steal! People, this is not just big powers like the UK or Germany, but everyone out there. We are subsidizing the world. If derivatives are connected to these transactions and they are, the whole system could crash overnight. The Fed also does currency swaps with other central banks. There are other machinations that no one knows about, but in the end, the US taxpayer will be on the hook. By next year there will be rumblings in the global community to end the power of the dollar as the reserve currency of the world. When our dollar is surrendered to a basket of currencies, we all will feel inflation. Our dollar will buy less and then, you will remember this meme, End the Fed!
Wednesday, April 8, 2020
10 on Death Watch...and counting
The loss of human life is tragic. When out of the ordinary, its pain seems more acute. The coronavirus is causing more than loss of life. It will be the nail in the coffin for many aspects in our society. Not only did it change March Madness into the "Silent Spring," but the effects of the disease has effected all our sport leagues and activities. It has disrupted houses of worship. It puts all interactions under a new glass of stress and worry. It could get worse. What if mail is stopped? What if hospitals close due to dangers of their air quality and safety? What if truckers stop delivering which forces grocery stores to close? The possible ramifications are endless and terrifying. Enough said.
4.4%
is the figure that the labor department says where our unemployment jumped too. This is totally wrong. It is totally short of the truth. We know and I know from past experience. Back in 2008 I got laid off from work. I didn't even know where the unemployment office was located in Florida. I found out that claims can be done by phone. Problem was you never got through to file your claim. Eventually, I filed a claim through the internet. I lost three weeks of payments, and by the way, even when the claim is complete, there is a waiting period.
Today, it is worse because most states have cut back on services like the unemployment office. Many, like in Florida, have also cut back on the length of receiving payments. This was done by the anti-union, anti-worker, Governor Scott. Sadly, this poor excuse for a human is now their state senator.
In addition, all unemployment claims are only done now-a-days through the internet. Millions of Americans use their public library for internet connections. Even if some of these people get through to begin their claim, time allotments cut short their application procedure. These poor souls are in limbo. These people as well as many others have no way to register their claim in a timely manner. There are countless jobs that are described as self-employment. They are not being counted. What about poor waitresses? They only make $2.13 per hour. What kind of unemployment check will that amount too? Un-documented immigrants will not be able to get a tax relief check. How will they exist? The real percentage of the unemployed is triple what the government reports. The questions are endless, the ramifications are terrifying. Enough said.
Where this is going...
We all should know by now that retail in America has been suffering since the emergence of the PC. Our national government has allowed commerce on the internet to be free of a sales tax. This is the heart of the problem for brick and mortar locations. E-commerce has a built-in sales advantage from 6% or more over shopping centers and malls. This is why retail is dying a slow razor blade death...until now. The CORVID-19 is the death poison. The end is close for the ten businesses that are in this piece. The sad truth is almost all retail will be forced to close stores and consolidate to limit debt. The ones that I have assembled are on their last breath. Sadly, I must inform you in conjunction with our unemployment picture that retail accounts for 52 million jobs. The virus has caused anchor mall giants, Macy's, Nordstrom, Apple and Nike to close all their stores. This will kill more malls. Simon Properties, the biggest mall landlord is closing 200 of its shopping centers. Every week new news is more bad news and more of the same. You could pray that on Sunday, we not only remember His rising from the dead, but with Him, all is possible. Maybe He will eradicate the virus from our air. Thank you, Father.
10 on Death Watch
1) J. C. Penny: too much debt, closing stores which means less revenue for debt service.
2) Ascenta: parent of Ann Taylor. Already closed Dressbarn before virus, predict more losses &-Rev.
3) Stage: was looking good with acquisition of Gordmans, now too much debt and no revenues.
4) Express:based in malls, stores closed due to virus. No revenues, was already losing to e-commerce.
5) Francesca's: closed all locations, no revenues and out of cash.
6) Stein Mart: was already selling assets before virus. Now, it is offering itself and no takers!
7) Container Store: $14 million in cash. $64 million in assets. $300 million in debt. Do the math!
8) GNC: already lost in battle with-commerce. $859 million in debt which it cannot service.
9) J. Jill: women's apparel - closed all stores. No revenues, but still owes rent, utilities and debt.
10)Tailored Brands: A.K.A. Men's Wearhouse. Closed stores, but it is still willing to pay employees.
Beautiful gesture, but it will not last as liabilities is in excess of credits.
The above is part of the on-going crisis which is retail in America. I remind you that no expert correctly predicted the unemployment rate, not even Sabastian. However, Sebastian was correct in calling out Amazon for their phony hiring ad. It was learned last week that Amazon fired employees who sought to unionize the warehouse jobs or anyone who complained about health safety aspects. The collapse of retail in America has many ramifications with endless and terrifying possibilities. Enough said!
4.4%
is the figure that the labor department says where our unemployment jumped too. This is totally wrong. It is totally short of the truth. We know and I know from past experience. Back in 2008 I got laid off from work. I didn't even know where the unemployment office was located in Florida. I found out that claims can be done by phone. Problem was you never got through to file your claim. Eventually, I filed a claim through the internet. I lost three weeks of payments, and by the way, even when the claim is complete, there is a waiting period.
Today, it is worse because most states have cut back on services like the unemployment office. Many, like in Florida, have also cut back on the length of receiving payments. This was done by the anti-union, anti-worker, Governor Scott. Sadly, this poor excuse for a human is now their state senator.
In addition, all unemployment claims are only done now-a-days through the internet. Millions of Americans use their public library for internet connections. Even if some of these people get through to begin their claim, time allotments cut short their application procedure. These poor souls are in limbo. These people as well as many others have no way to register their claim in a timely manner. There are countless jobs that are described as self-employment. They are not being counted. What about poor waitresses? They only make $2.13 per hour. What kind of unemployment check will that amount too? Un-documented immigrants will not be able to get a tax relief check. How will they exist? The real percentage of the unemployed is triple what the government reports. The questions are endless, the ramifications are terrifying. Enough said.
Where this is going...
We all should know by now that retail in America has been suffering since the emergence of the PC. Our national government has allowed commerce on the internet to be free of a sales tax. This is the heart of the problem for brick and mortar locations. E-commerce has a built-in sales advantage from 6% or more over shopping centers and malls. This is why retail is dying a slow razor blade death...until now. The CORVID-19 is the death poison. The end is close for the ten businesses that are in this piece. The sad truth is almost all retail will be forced to close stores and consolidate to limit debt. The ones that I have assembled are on their last breath. Sadly, I must inform you in conjunction with our unemployment picture that retail accounts for 52 million jobs. The virus has caused anchor mall giants, Macy's, Nordstrom, Apple and Nike to close all their stores. This will kill more malls. Simon Properties, the biggest mall landlord is closing 200 of its shopping centers. Every week new news is more bad news and more of the same. You could pray that on Sunday, we not only remember His rising from the dead, but with Him, all is possible. Maybe He will eradicate the virus from our air. Thank you, Father.
10 on Death Watch
1) J. C. Penny: too much debt, closing stores which means less revenue for debt service.
2) Ascenta: parent of Ann Taylor. Already closed Dressbarn before virus, predict more losses &-Rev.
3) Stage: was looking good with acquisition of Gordmans, now too much debt and no revenues.
4) Express:based in malls, stores closed due to virus. No revenues, was already losing to e-commerce.
5) Francesca's: closed all locations, no revenues and out of cash.
6) Stein Mart: was already selling assets before virus. Now, it is offering itself and no takers!
7) Container Store: $14 million in cash. $64 million in assets. $300 million in debt. Do the math!
8) GNC: already lost in battle with-commerce. $859 million in debt which it cannot service.
9) J. Jill: women's apparel - closed all stores. No revenues, but still owes rent, utilities and debt.
10)Tailored Brands: A.K.A. Men's Wearhouse. Closed stores, but it is still willing to pay employees.
Beautiful gesture, but it will not last as liabilities is in excess of credits.
The above is part of the on-going crisis which is retail in America. I remind you that no expert correctly predicted the unemployment rate, not even Sabastian. However, Sebastian was correct in calling out Amazon for their phony hiring ad. It was learned last week that Amazon fired employees who sought to unionize the warehouse jobs or anyone who complained about health safety aspects. The collapse of retail in America has many ramifications with endless and terrifying possibilities. Enough said!
Wednesday, April 1, 2020
The End of Capitalism
April Fools...
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
Wednesday, March 25, 2020
Odds and Ends: March 2020
- Americans are, "satisfied with not less than the best in airplanes and plumbing but accepts the second rate in politics and culture," according to the 1954 book, Age of Conformity by Alan Valentine.
Has nothing changed in the 60-plus years since those words appeared before us? Sadly, it has gotten worse. Politician's spout ideas based solely on how many votes will they garner. President Trump realized that he lost the confidence of America with his first brush with the danger of the virus. He was smart enough to pass the baton to Doctor Fauci. The good doctor realizing the preparation period was missed, advised "keeping a distance" and ending all gatherings of more than 10 people. His heeding's are being followed in states that are suffering the most viral cases. Weak minded reporter's and politician's seeking some insight so that they can be the first to call the end to the virus, keep pestering Dr. Fauci to give a date in defeating this new disease. Thank God, he is a man of integrity. He is too kind to these shills. He never loses his cool no matter how self-serving the question. Compare that to President Trump's lack of control and lack of clear thinking with a reporter questioned him on the same theme? By the way, the democrats are no better. They all want to appear that they have our best interest at heart. They really are seeking to buy your vote in this election year.
By passing $2 trillion plus in stimulus, they will all take bows. What will they do when this fails?
Real Problem
is the lack of truth and facing reality by the people in command. In many cases of contagious flu's, there is a second appearance of the disease after the first known cases hit society. This happens in the following Autumn or Winter. This aspect has not even been forthright in the discussion. However, these same leaders know this possibility. This is why there is a sudden rush to help the economy as more and more businesses and places where people are congested are being ordered to close their doors until the virus passes.
As usual the same help formulas are on the table as in the past. This is the real problem.
Privatize the profits; socialize the losses.
This is what our government does in a crisis. All the complaints over the 2008 financial crisis about bailing out the banking industry while at the same time, this industry was foreclosing on their customer's homes was brushed aside during the crisis. Then, the democrats used this republican answer to defeat them in that election year. They promised redemption. We are still waiting as not one white collar person went to jail. Industry after industry went to the government with the "tin cup." If I may, I will paraphrase the famous poem at the doorway to America. It is sad, but true. Industry after industry used free cash flow to buyback their shares. They bought at the highs (idiots) while at the same time, these CEOs did not replenish their workers pension funds. I believe their should be a law which says, every corporation has the right to do buybacks, if it wants too with shareholders money, however those actions can only be put into effect after all their obligations are met like pension requirements, like a serviceable debt ratio like saving for a rainy day. At the moment the airlines and hospitality businesses are very vulnerable. They were the first to get in line before Congress. Did you know that airlines spent 96% of their free cash flow since 2009 on buybacks? Boeing spent 74% on them. Now, both demand help. Their poem goes like this:
Our industry is tired, our poor workers are huddled enmass.
Give me billions to recoup as workers are yearning, fearing
eviction at their door; this wretched disease is making them
homeless. This tempest-tost is dimming my lamp and will
force me to close my door.
Did not the bankers say the same thing in 2008? Whatever the outcome to meet this crisis by government, the price will come back to crush us in the near future. The debt will explode to a point where all nations will seek to end the dollar as the world's reserve currency. The IMFs ego seeks the power that will appear due to this awaking. China's ego will surface. A compromise will leave the US in a basket of currencies. It will be the first step in the end as our reign as the number one nation in the world. The inflationary effects of this possibility will crush the value of the dollar. It will cause a terrible inflation to our economy. It could get worse with the return of stagflation. The only solution is to distance our nation from China immediately. End all trade. Delist all Chinese firms from our stock exchanges. We do not need to invest in a nation which seeks to displace ours. Put excessive tariffs on all US firms making their product in China. Give all importers a six month notice before implementing this extreme measure. In this way, they can arrange to replant here in America or seek a new supply chain, preferably with Europe or South America. The bottom line is this: China graduates 3-million plus new engineers every year and the US only adds 200,000. Even though we are way more creative than China, the odds favor that one in a million can create a major advantage to a nation that is still communist at heart and in addition, they will still steal our intellectual advances with no conscience. This is the real disease!
My Mom use to say...
there is good and bad in all kinds. The Chinses doctors practice the code, "Do no harm." They have been forthright in providing knowledge about the virus and their techniques in fighting this disease. It is a shame that their government leaders do not adhere to the medical code.
non sequitur...means does not follow.
Apparently, among all of the outsourced labor and product is medicine. Guess who exports most of the US supply in this category. That's right-China. You know, when I was back in high school and in Latin class, I use to say to myself, why am I here? I'll never use this stuff." Well, I used it here. After I stated a shout out to the Chinese doctors, I added this other down beat notation.
By the way our nation graduates lawyers. This puts one against another with money the driving force. This is why our government does not work. They are all lawyers!
Negative interest rates
are coming as all nations central banks have cut interest rates. This is why the dollar is advancing. This has a two prong effect. Our exports will shrink, but our citizens won't notice because prices will decline as we import everything. Nation's awaken to the realization that the dollar is in deep trouble.
After the crisis passes, a meme will surface to create a new world trading currency because civil unrest will develop everywhere as citizens realize that negative interest rates make money worthless.
The first hurdle will be with the ECB and Germany. The German high court is scheduled to meet to determine if the ECBs purchase with QE is legal?
JOBS!!!
When the government has asked you to stay home in order to avoid getting sick or passing sickness, Amazon posts a job hiring of 100,000. This shows how devious this company is in its thinking. They realize that their people may stay at home. They need bodies in their warehouses. They put pressure on their employed workers by declaring in undeclared terms that they could be replaced. This playbook goes back to the early industrial revolution in our nation. Men were fired at textile firms and replaced by women for attempting to go union. When women realized the same perspective as the men, they were fired. They were replaced with children who were treated like slaves. Oh, yeah,
Amazon fears that union talk will surface, especially since workers are at home and they could talk online. The topic of health care will be one of the workers concerns.
Independence?
is questionable in the US. The word has no strength. I am using the word with reference to government agencies. President Trump is fearing the public's reaction and his bid for re-election will be severely hurt when states collect their unemployment claims this week. He publicly asked them not to be accurate and to delay the count so the weekly unemployment does not set a new all-time record to which will cause the public to lose confidence in the president. How can it not set a record? The hospitality industry alone employs over 15 million citizens. He even added to this idea by suggesting that their be limits on the health care limits of staying at home. He believes we can wear a mask and get back to work?!
He hopes by Easter Sunday. As for the preliminary results for unemployment claims-there was no winner in the pool. No one came close as the number exploded past 3,2 million claims...and counting.
First it was...toilet paper
then, it was food. Now, it is cash, Banks are already limiting withdrawals.
The list is long. The effects powerful. The truth hurts.
Hotel occupancy fell 61% after the first week in March.
Retail sales were actually up 6%. Nothing like hoarding to boost for a day, but the future?
Movie and Box Office will be a disaster, Broadway leads the list by closing until the flu passes.
Consumer comforts like dining out and leisure activities are down and mostly out.
None of this is good for workers and the rest of us, but one thing is certain. Whatever help the government provides is like a forward pass. The receiver will always be the banks as they hold loans and mortgages on all of us. Like I said last week (no one listens) give everyone a holiday so no one has to pay a loan, rent or mortgage. Let the banks feel a month of pain and like the old saying, "If you owe the bank $1,000, you are in trouble. If you owe the bank billions, they are in trouble." They received the bailout in 2008, let them bailout the nation and save the government from destroying the currency and a future economic crisis. Gold is beginning to show the damage fiat governments is doing to the dollar and currencies in general. This is a slow awakening, but the cast on the dye has been set.
Has nothing changed in the 60-plus years since those words appeared before us? Sadly, it has gotten worse. Politician's spout ideas based solely on how many votes will they garner. President Trump realized that he lost the confidence of America with his first brush with the danger of the virus. He was smart enough to pass the baton to Doctor Fauci. The good doctor realizing the preparation period was missed, advised "keeping a distance" and ending all gatherings of more than 10 people. His heeding's are being followed in states that are suffering the most viral cases. Weak minded reporter's and politician's seeking some insight so that they can be the first to call the end to the virus, keep pestering Dr. Fauci to give a date in defeating this new disease. Thank God, he is a man of integrity. He is too kind to these shills. He never loses his cool no matter how self-serving the question. Compare that to President Trump's lack of control and lack of clear thinking with a reporter questioned him on the same theme? By the way, the democrats are no better. They all want to appear that they have our best interest at heart. They really are seeking to buy your vote in this election year.
By passing $2 trillion plus in stimulus, they will all take bows. What will they do when this fails?
Real Problem
is the lack of truth and facing reality by the people in command. In many cases of contagious flu's, there is a second appearance of the disease after the first known cases hit society. This happens in the following Autumn or Winter. This aspect has not even been forthright in the discussion. However, these same leaders know this possibility. This is why there is a sudden rush to help the economy as more and more businesses and places where people are congested are being ordered to close their doors until the virus passes.
As usual the same help formulas are on the table as in the past. This is the real problem.
Privatize the profits; socialize the losses.
This is what our government does in a crisis. All the complaints over the 2008 financial crisis about bailing out the banking industry while at the same time, this industry was foreclosing on their customer's homes was brushed aside during the crisis. Then, the democrats used this republican answer to defeat them in that election year. They promised redemption. We are still waiting as not one white collar person went to jail. Industry after industry went to the government with the "tin cup." If I may, I will paraphrase the famous poem at the doorway to America. It is sad, but true. Industry after industry used free cash flow to buyback their shares. They bought at the highs (idiots) while at the same time, these CEOs did not replenish their workers pension funds. I believe their should be a law which says, every corporation has the right to do buybacks, if it wants too with shareholders money, however those actions can only be put into effect after all their obligations are met like pension requirements, like a serviceable debt ratio like saving for a rainy day. At the moment the airlines and hospitality businesses are very vulnerable. They were the first to get in line before Congress. Did you know that airlines spent 96% of their free cash flow since 2009 on buybacks? Boeing spent 74% on them. Now, both demand help. Their poem goes like this:
Our industry is tired, our poor workers are huddled enmass.
Give me billions to recoup as workers are yearning, fearing
eviction at their door; this wretched disease is making them
homeless. This tempest-tost is dimming my lamp and will
force me to close my door.
Did not the bankers say the same thing in 2008? Whatever the outcome to meet this crisis by government, the price will come back to crush us in the near future. The debt will explode to a point where all nations will seek to end the dollar as the world's reserve currency. The IMFs ego seeks the power that will appear due to this awaking. China's ego will surface. A compromise will leave the US in a basket of currencies. It will be the first step in the end as our reign as the number one nation in the world. The inflationary effects of this possibility will crush the value of the dollar. It will cause a terrible inflation to our economy. It could get worse with the return of stagflation. The only solution is to distance our nation from China immediately. End all trade. Delist all Chinese firms from our stock exchanges. We do not need to invest in a nation which seeks to displace ours. Put excessive tariffs on all US firms making their product in China. Give all importers a six month notice before implementing this extreme measure. In this way, they can arrange to replant here in America or seek a new supply chain, preferably with Europe or South America. The bottom line is this: China graduates 3-million plus new engineers every year and the US only adds 200,000. Even though we are way more creative than China, the odds favor that one in a million can create a major advantage to a nation that is still communist at heart and in addition, they will still steal our intellectual advances with no conscience. This is the real disease!
My Mom use to say...
there is good and bad in all kinds. The Chinses doctors practice the code, "Do no harm." They have been forthright in providing knowledge about the virus and their techniques in fighting this disease. It is a shame that their government leaders do not adhere to the medical code.
non sequitur...means does not follow.
Apparently, among all of the outsourced labor and product is medicine. Guess who exports most of the US supply in this category. That's right-China. You know, when I was back in high school and in Latin class, I use to say to myself, why am I here? I'll never use this stuff." Well, I used it here. After I stated a shout out to the Chinese doctors, I added this other down beat notation.
By the way our nation graduates lawyers. This puts one against another with money the driving force. This is why our government does not work. They are all lawyers!
Negative interest rates
are coming as all nations central banks have cut interest rates. This is why the dollar is advancing. This has a two prong effect. Our exports will shrink, but our citizens won't notice because prices will decline as we import everything. Nation's awaken to the realization that the dollar is in deep trouble.
After the crisis passes, a meme will surface to create a new world trading currency because civil unrest will develop everywhere as citizens realize that negative interest rates make money worthless.
The first hurdle will be with the ECB and Germany. The German high court is scheduled to meet to determine if the ECBs purchase with QE is legal?
JOBS!!!
When the government has asked you to stay home in order to avoid getting sick or passing sickness, Amazon posts a job hiring of 100,000. This shows how devious this company is in its thinking. They realize that their people may stay at home. They need bodies in their warehouses. They put pressure on their employed workers by declaring in undeclared terms that they could be replaced. This playbook goes back to the early industrial revolution in our nation. Men were fired at textile firms and replaced by women for attempting to go union. When women realized the same perspective as the men, they were fired. They were replaced with children who were treated like slaves. Oh, yeah,
Amazon fears that union talk will surface, especially since workers are at home and they could talk online. The topic of health care will be one of the workers concerns.
Independence?
is questionable in the US. The word has no strength. I am using the word with reference to government agencies. President Trump is fearing the public's reaction and his bid for re-election will be severely hurt when states collect their unemployment claims this week. He publicly asked them not to be accurate and to delay the count so the weekly unemployment does not set a new all-time record to which will cause the public to lose confidence in the president. How can it not set a record? The hospitality industry alone employs over 15 million citizens. He even added to this idea by suggesting that their be limits on the health care limits of staying at home. He believes we can wear a mask and get back to work?!
He hopes by Easter Sunday. As for the preliminary results for unemployment claims-there was no winner in the pool. No one came close as the number exploded past 3,2 million claims...and counting.
First it was...toilet paper
then, it was food. Now, it is cash, Banks are already limiting withdrawals.
The list is long. The effects powerful. The truth hurts.
Hotel occupancy fell 61% after the first week in March.
Retail sales were actually up 6%. Nothing like hoarding to boost for a day, but the future?
Movie and Box Office will be a disaster, Broadway leads the list by closing until the flu passes.
Consumer comforts like dining out and leisure activities are down and mostly out.
None of this is good for workers and the rest of us, but one thing is certain. Whatever help the government provides is like a forward pass. The receiver will always be the banks as they hold loans and mortgages on all of us. Like I said last week (no one listens) give everyone a holiday so no one has to pay a loan, rent or mortgage. Let the banks feel a month of pain and like the old saying, "If you owe the bank $1,000, you are in trouble. If you owe the bank billions, they are in trouble." They received the bailout in 2008, let them bailout the nation and save the government from destroying the currency and a future economic crisis. Gold is beginning to show the damage fiat governments is doing to the dollar and currencies in general. This is a slow awakening, but the cast on the dye has been set.
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